saturdaypowerballnumbers| Second-hand housing prices in Japan's core areas surge sharply, overseas investors stay close amid entanglement

Financial Associated Press, May 11 (Editor Shi Zhengcheng) low financing rates, decent rent-to-sales ratio, and the sharp depreciation of the yen and other factors have made international investors think about the Japanese property market from time to time in recent years. As house prices in the core of Japan have accelerated in recent years, the heat of the discussion has also increased.

Over the past year, Tokyo Kantei, a Tokyo real estate research firm, has surveyed the average listing prices of apartments built about a decade ago near Japan's main railways and subway stations and compared them with those when they were built a decade ago, according to the latest report on Saturday.

Before the release of the full report, Tokyo Kantei was the first to reveal changes in house prices in some core areas. For example, the area of Niigata Water Station, located on the Tokyo Metro Chiyoda Line, was Yiping ten years ago (about 3.SaturdaypowerballnumbersThe average price of an apartment, which is 4.24 million yen (197000 yuan), has risen to 12.55 million yen (582000 yuan).

In Osaka in western Japan, the prices of apartments near Osaka Station have doubled in the past decade.SaturdaypowerballnumbersIn the central city of Nagoya, the price of similar apartments has risen by nearly 40%.

There is also a historical reason behind this surge: these houses were built after the 2011 earthquake in East Japan, and the earthquake, tsunami and nuclear leak brought great uncertainty to Japan, making it difficult for property values to be left alone.

In the past few years, another factor has begun to push up Japanese house prices: the depreciating yen and the influx of foreign buyers.

"it's still not expensive in dollar terms."

Joe Rigby, chairman of Housing Japan, which mainly sells apartments in central Tokyo to foreigners, said foreign buyers had been enthusiastic about coming to Tokyo since the COVID-19 epidemic eased. In particular, Rigby added that house prices in Tokyo have not risen in dollar terms.

In January 2021, the dollar could be exchanged for almost 103 to 104 yen, and even 160 yen last week. In other words, the purchasing power of foreigners in Japan has increased by at least 50% in just over three years.

From this point of view, it is no coincidence that housing prices in Tokyo will rise sharply after 2021.

Of course, it is not only second-hand houses that are rising, but the prices of new apartments are also rising. According to data released earlier this year by the Tokyo Institute of Real Estate Economics, the average price of a new apartment in Tokyo's 23 district was 114 million yen (5.28 million yuan) in 2023, a year-on-year growth rate of 39.4% while breaking 100 million for the first time. In terms of dimensions over the past five years, the average price of new apartments in Tokyo has risen by 60.8%.

There is another reason behind the surge in transaction prices for new homes: real estate developers are paying more attention to high-income people in downtown areas and developing more expensive projects.

There are also elements to attract foreign investors.

For foreign investors, housing in Japan's core areas has two major advantages: prices are lower than those in international metropolises such as Singapore and New York, and the rent-to-sale ratio is also more substantial.

The Japan Real Estate Research Institute has compiled an index of apartment prices in cities around the world in October 2023, setting prices in Tokyo's high-end port areas at 100, compared with 205.4 in London and 142.9 in New York. Meanwhile, according to Numbeo, a global cost of living database, rental returns for apartments in central Tokyo are about 3.2 per cent, compared with 5 per cent for 10-year-old apartments in Chiyoda or the port district.

The rate of return for horizontal comparison is about 3.1% in Singapore and about 1.8% in Hong Kong, China.

Tokyo is still the only one of Japan's 47 prefectures with a net increase in population in the past year, according to population data released by the Japanese government in April. The high concentration of social resources and the shortage of leased units are also the core factors to support rent.

Of course, the comparison here only takes into account the price of the property purchased, while the long-term cost of owning the property is not included, such as the Japanese real estate tax (fixed assets tax and urban planning tax). Simply calculated according to the 1.4% "Gudu tax" rate, the tax paid by holding a house for 71 years is equal to the money spent on buying a house that year. For foreign investors, the next move of the yen exchange rate is also a difficult problem that has to be considered.